SINGAPORE (Reuters) - ESR-REIT and rival Viva Industrial Trust are in exclusive talks for a merger, which if completed, would mark the first consolidation among Singapore’s crowded mid-cap real estate investment trusts.

ESR-REIT, which is backed by Asian logistics developer e-Shang Redwood (ESR) - a venture of private equity firm Warburg Pincus and large global investors, said on Monday that its manager had submitted a proposal to merge it with Viva.

The proposed deal is expected to create the fourth-largest industrial REIT in Singapore, with an overall asset size of about S$3.0 billion ($2.3 billion), ESR-REIT said in a statement.

“The objective is to create a sizeable and liquid industrial REIT with an Asian footprint well supported by a developer sponsor financially and across the real estate value chain,” ESR-REIT said.

In a separate statement, Viva said it had received the merger proposal. Both companies cautioned that there was no certainty of a deal.

ESR-REIT is valued at S$747 million ($572 million) and Viva has a market value of S$907 million ($694 million). ESR-REIT units were flat in afternoon trade, while units of Viva were up 2 percent at S$0.955.

Reuters reported on Friday that ESR-REIT and Viva were in merger talks.

The property portfolio of both companies comprises general industrial, logistics, warehouses and business parks.

In November, ESR Funds Management (S) Ltd, the manager of ESR-REIT, and Sabana Shariah Compliant Industrial REIT called off their talks, which sources said were focused on ESR-REIT buying Sabana REIT.

Citigroup Global Markets Singapore, RHB Securities Singapore and United Overseas Bank Ltd are the financial advisers to ESR-REIT’s manager on the merger proposal while Merrill Lynch (Singapore) is the financial adviser to Viva.